KTBA/SECP
Workshop on Corporate Laws.
SPEAKER
RAHAT AZIZ
ON
Compliance of Listing Regulation
&
Procedure for Members Voluntary
Winding Up
COMPLIANCE
Compliance means conforming to a
rule, such as a specification, policy,
standard or law.
REGULATORY COMPLIANCE
Regulatory compliance describes
the goal that corporations or public
agencies aspire to in their efforts to
ensure that personnel are aware of
and take steps to comply with
relevant laws and regulations.
My Topic is:
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Compliances of Listing Regulations.
Which I have further divided into
Pre/During Listing Regulation
Compliance.
Post/Ongoing Listing Regulations
Compliance.
LISTED COMPANY
means a company or a body corporate or other body
which has been listed in accordance with the
regulations and whose securities are listed and include a
provisionally listed company under these regulations
for trading in provisionally listed companies of the
Exchange;
LISTED SECURITY
shall include any share, scrip, debenture, participation
term certificate, modaraba certificate, musharaka
certificate, term finance certificate, bond, preorganization certificate or such other instruments as the
Federal Government may by notification in the Official
Gazette specify for the purpose and which is accepted
for listing on the Exchange in accordance with the
Regulations. (Regulation 2)
PRE/DURING LISTING REGULATION
COMPLIANCE
FORMS:
I.
Application.
II. Undertaking
(To Abide By the Listing Regulation)
III. Undertaking
(To
issue
scrip-less/Physical
Scrip
Shares)
IV. NOC from underwriters.
(for publication of prospectus)
PRE/DURING LISTING REGULATION
COMPLIANCE
LEGAL DOCUMENTS:
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Certificate of Incorporation.
Conversion certificate; (If applied).
Commencement of Business Certificate.
BOD Resolution addressing listing decision.
Consent, license, approval, NOC from the concerned regulatory
authority.
Copies of the Draft Prospectus.
Certificate of registration of Modaraba Management Co.
Authorization for floatation of Modaraba.
Memorandum of Association & Articles of Association.
Trust Deed, in case of debenture.
PRE/DURING LISTING REGULATION
COMPLIANCE
CERTIFICATES/REPORTS:
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Feasibility Report.
Auditors Certificate
(Amounts subscribed by Sponsors/Promoters/Directors
/Associates/Friends/Relatives & Shares subscribed under
private placement.
Auditors Certificate
(under section 53 read with clause 28 (i) of Section 2 of
Part-I of the Second Schedule) EPS of last five years)
Auditors Certificate
(Break up value)
Credit rating report if it is debenture/TFC.
PRE/DURING LISTING REGULATION
COMPLIANCE
CONSENTS:
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Underwriters.
Bankers.
Directors.
Chief Executive
Secretary.
Ballotters.
Experts – if any.
PRE/DURING LISTING REGULATION
COMPLIANCE
MATERIAL CONTRACTS:
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Certified copies of the agreement with Managing, Selling,
Agents, Managing & Technical Directors.
Certified copies of the agreement with vendors, underwriters
& Brokers.
Certified copies of the agreement with DFI & financial
institution.
Copies of the title deeds of land.
Copies of Government license & NOC.
Agreement with lead Manager & Book runners.
PRE/DURING LISTING REGULATION
COMPLIANCE
FEE:
As per Regulation 32
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Initial Listing Fee.
Annual Listing Fee.
Services Charges.
BRIEF ABOUT BOOK-BUILDING
Book-Building is a process used by companies raising
capital through Public Offerings. It is the practical
mechanism for the quick and efficient management of
public offerings.
In general, it is an innovative method of marketing
securities involving price determination and quantum of
securities on the basis of the demand from the
prospective shareholders.
DEFINITION:
SECP guidelines defines Book-Building as
“a
mechanism of price determination through which
indication of interest for investment in the shares
offered by an issuer/offeror is collected from
Institutional Investors and HNWI and a book is built
which gives a picture of demand for the shares at
different price levels. The strike price is determined
based on the price at which demand for the share at
the end of book building period is sufficient to raise
the minimum capital required”.
BOOK-BUILDING PROCESS
TOTAL PUBLIC ISSUE
(i.e., net offer to the public)
BOOK BUILDING
METHOD
FIXED PRICE
METHOD
not more than 75%
of the total offer
shall be allocated to
institutional investors
and HNWI
not less than 25%
of the total offer
shall be allocated
to the general public
ELIGIBILITY
A public limited company or a body corporate which intends
to issue shares to the general public under Section 57 of the
Companies Ordinance, 1984 and makes an application to a
stock exchange for listing of its shares or an Offeror who
intends to offer shares under Section 62 of the Companies
Ordinance, 1984 and makes an application to a stock
exchange for listing of such shares, where applicable, and is
in compliance with Listing Regulations of the stock
exchange, is eligible to issue/offer its shares through Book
Building process subject to the following conditions

not more than 75% of the total offer shall be
allocated for offer through book building process
to institutional investors and HNWI; and

not less than 25% of the total offer shall be
allocated for offer to the general public.
DIFFERENCE BETWEEN
FIXED PRICE PROCESS AND BOOK-BUILDING PROCESS
Features
Fixed Price Process
Book-Building Process
Pricing
Price at which the securities are Price at which the securities are offered is
offered is known in advance to not known in advance to the investors.
the investors.
Investors decide the price through tender
method.
Demand
Demand for the securities is not
known until the close of the
issue.
Demand for the securities offered can be
known every day as the book is built.
Payment
100% advance payment is
required to be made by the
investors at the time of
application.
Margin for bidding placed by :
HNWIs ---------- Up to 100% of application
money
Institutions ------ not less than 25% of
application money
Successful bidders shall deposit the balance
amount within seven working days of the
close of bidding period.
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 14 (1)
Particulars:
Closure of Share Transfer Book
With Whom:
Stock Exchanges
Time Frame:
21 days prior to closure
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 16 (1)
Particulars:
Intimation of Dividend/Bonus
With Whom:
Stock Exchanges
Time Frame:
Immediately after decision of BOD
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 16 (5)
Particulars:
Intimation of Dividend/other entitlements
With Whom:
Stock Exchanges
Time Frame:
14 days prior to book closure
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 17
Particulars:
Financial results for quarter ended, half yearly and annual
accounts.
With Whom:
Stock Exchanges
Time Frame:
Normally the same day these are approved by BOD
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 18 (1)
Particulars:
300 copies of annual report and audited accounts.
With Whom:
Stock Exchanges
Time Frame:
21 days before AGM
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 18 (2)
Particulars:
Copies of all notices as well as resolutions of AGM and EGM.
With Whom:
Stock Exchanges
Time Frame:
Prior to their publication/despatch to shareholders
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 18 (2)
Particulars:
Certified copies of all such resolutions
With Whom:
Stock Exchanges
Time Frame:
As soon as adopted and effective
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 18 (3)
Particulars:
300 copies of quarterly/half yearly accounts
With Whom:
Stock Exchanges
Time Frame:
As soon as printed/published
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 19 (1) (iii)
Particulars:
Intimation that all dividend warrants posted
With Whom:
Stock Exchanges
Time Frame:
As soon as posted
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 21 (1)
Particulars:
Copies of minutes of AGM and EGM
With Whom:
Stock Exchanges
Time Frame:
Within 60 days of meeting
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 21 (2)
Particulars:
Complete list of shareholders as at 31st December
With Whom:
Stock Exchanges
Time Frame:
30 days of calendar year end
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 22
Particulars:
Intimation of change in Authorized Capital and Paidup Capital
With Whom:
Stock Exchanges
Time Frame:
Immediately on recommendation by BOD
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 24 (1) (ii)
Particulars:
Intimation of mailing of Bonus Shares
With Whom:
Stock Exchanges
Time Frame:
Immediately after mailing
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 26
Particulars:
Prior clearance for any amendment proposed to be made in
Memorandum and Articles
With Whom:
Stock Exchanges
Time Frame:
Before placed for approval to shareholders
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 28 (1)
Particulars:
Prior approval of the date and time of holding Annual General
Meeting
With Whom:
Stock Exchanges
Time Frame:
Before BOD meeting setting forth date of AGM
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 29
Particulars:
The date and time of Board meeting
With Whom:
Stock Exchanges
Time Frame:
In advance of holding BOD meeting i.e. atleast 7 days before
meeting
POST/ONGOING LISTING REGULATIONS
COMPLIANCE.
Law Reference:
Reg. 32 (3)
Particulars:
Annual listing fee
With Whom:
Stock Exchanges
Time Frame:
By September 30 annually in advance
WHEN THINGS ARE GOING WRONG
Receiver & Manager
Investigation
Arrangement
S.137
S.265
S.284
S.290
S.295
S.305
Complain to Court
Management by
Administrator
Winding Up
MODES OF WINDING UP:
The winding up of a company may be either1)
2)
3)
By the Court; or
Voluntary; or
Subject to the supervision
of the Court.
By Members
By Creditors
PROCEDURE FOR VOLUNTARY
WINDING UP
The following steps are to be taken for Member’s
voluntary winding up under the provisions of the
Ordinance, and the Companies rules.
STEP 1
Where it is proposed to wind up a company voluntarily,
its directors make a declaration of solvency on Form
107 prescribed under Rule 269 of the Rules duly
supported by an auditors report and made a decision in
their meeting that the proposal to this effect may be
submitted to the shareholders. They, then, call a general
meeting (Annual or Extra Ordinary) of the members
(Section 362 of the Ordinance).
STEP 2
The company, on the recommendations of directors,
decides that the company be wound up voluntarily and
passes a Special Resolution, in general meeting (Annual
or Extra Ordinary) appoints a liquidator and fixes his
remuneration. On the appointment of liquidator, the
Board of Directors ceases to exist. (Sections 358 and 364
of the Ordinance).
STEP 3
Notice of resolution shall be notified in official Gazette
within 10 days and also published in the newspapers
simultaneously. A copy of it is to be filed with registrar
also. (Section 361 of the Ordinance).
STEP 4
Notice of appointment or change of liquidator is to be
given to registrar by the company alongwith his consent
within 10 days of the event. (Section 366 of the
Ordinance).
STEP 5
Every liquidator shall, within fourteen days of his
appointment, publish in the official Gazette, and deliver
to the registrar for registration, a notice of his
appointment under Section 389 of the Ordinance on
Form 110 prescribed under Rule 271 of the Rules.
STEP 6
If liquidator feels that full claims of the creditors cannot
be met, he must call a meeting of creditors and place
before them a statement of assets and liabilities.
(Section 368 of the Ordinance).
STEP 7
A return of convening the creditors meeting together
with the notice of meeting etc. shall be filed by the
liquidator with the registrar, within 10 days of the date
of meeting. (Section 368 of the Ordinance).
STEP 8
As soon as affairs of the company are fully wound up,
the liquidator shall make a report and account of
winding up, call a final meeting of members, notice o
convening of final meeting on Form 111 prescribed
under Rule 279 of the Rules before which the
report/accounts shall be placed. (Section 370 of the
Ordinance).
STEP 9
A notice of such meeting shall be published in the
Gazette and newspapers atleast 10 days before the date
of meeting. (Section 370 of the Ordinance).
STEP 10
Within a week after the meeting, the liquidator shall
send to the registrar a copy of the report and accounts
on Form 112 prescribed under Rule 279 of the Rules.
(Section 370 of the Ordinance).
THANK YOU
Q&A